KARACHI, Pakistan --
Generals have governed Pakistan longer than politicians, and over their
many years in power, the military has refined the skill of stealth rule to
an art. So when voters go to the polls Thursday in the first general
elections since Gen. Pervez Musharraf seized power in an October 1999
coup, the men in uniform won't be surrendering power—just sharing some of
it.

A growing number of detractors say Musharraf, who declared
himself president last year, is trying to disguise military rule as
liberal democracy. Musharraf, who will remain president and commanding
general after the legislative elections, forced through constitutional
changes in August to guarantee the armed forces a central role in
government.

Musharraf has granted himself
the power to dismiss an elected parliament and prime minister. He also has
created a National Security Council and given several seats to military
officers. Opponents say that will allow the military to oversee an elected
government.

In addition, Musharraf has extended
the military's reach into state-run companies and agencies, installing
loyal officers in place of civilians at the top of the entities that
control everything from the phone system and postal service to road
construction and computer databases on citizens.

From Cereal to
Fertilizer

This administrative power melds with the military's
already enormous commercial enterprises, which dominate large parts of
Pakistan's economy with a network of companies that make products such as
breakfast cereals, milk and fertilizer. The military's business ventures
include an airline, an FM radio station, a pay-TV channel, insurance, real
estate and travel agencies, and one of the country's largest banks. All
this in a nation that devotes a very high 29% of its budget to the armed
forces, according to the World Bank.

Critics call this the
relentless militarization of Pakistani society and charge that the
generals who seized power promising to rid the country of corruption are
now supervising a more subtle form of it.

Ayesha Siddiqa-Agha, a
security analyst at Qaid-e-Azam University in Islamabad, the capital, has
spent years investigating the military's business interests and says they
aren't nearly as clean as they claim.

"When you dig into them, you
find out they are inefficient, and there is evidence of corruption,"
Siddiqa-Agha said. "There is also evidence of corruption linked to
monopolization of government contracts. That has increased in the past
three or four years."

Military regimes have governed Pakistan for
more than half of the 55 years since Britain granted the Indian
subcontinent independence. But the armed forces, especially the army, have
strengthened their control over government and the economy under
Musharraf, said Mian Raza Rabbani, a former federal law
minister.

"After Oct. 12, 1999, Pakistan has perhaps witnessed the
greatest militarization of civil society in its entire history," said
Rabbani, secretary-general of exiled former Prime Minister Benazir
Bhutto's Pakistan People's Party. "Never has the military been inducted
into such low levels of civil society."

Maj. Gen. Rashid Qureshi,
Musharraf's spokesman, said Rabbani and Siddiqa-Agha are wrong and
insisted that the 1999 coup gave Pakistan a high-quality government that
is cleaning up the problems it inherited.

"In the last years, there
has been no martial law or military government," Qureshi said. "It's a
government of civilians. President Musharraf selected the best Pakistani
civilians available in the world. And they are the ones who formed the
cabinets at the central level and at the provincial level. There is no
'militarization of society.' "

But Siddiqa-Agha, former director of
naval research for Pakistan's navy, said Musharraf has put about 500
uniformed officers in control of government agencies and state-run
corporations. The president has made no commitment to return any of those
jobs to civilians, and a newly elected government isn't likely to insist
on it, she added.

"The military is still powerful, and the fear is
there," Siddiqa-Agha said. "You don't want to go out of your way and annoy
the military as soon as you take over."

One military man now
heading a civilian agency is Maj. Gen. Farrukh Javed, whom Musharraf
installed as chairman of the National Highway Authority, which is planning
projects worth more than $800 million this fiscal year.

Last month,
the head of a private consortium building a major highway admitted at a
news conference that he won the $117-million contract—awarded without
competitive public bidding—with the help of retired army Brig. Aftab
Siddiqui, the father-in-law of Musharraf's son Bilal.

Sheikh
Yousaf, who owns Husnain Construction Ltd., said the brigadier was a
consultant on the project. But he isn't on the payroll anymore, Yousaf
added. When reporters pressed for more details, Yousaf's son ran onto the
stage and told him not to answer any more questions.

Pakistan's
water and power agency is another major state entity run by a man
handpicked from the army. Lt. Gen. Zulfiqar Ali Khan has headed the agency
since 1998, when then-Prime Minister Nawaz Sharif asked the military to
take charge of it because it was a mess, said Qureshi, the presidential
spokesman. Khan retired from the army last year, but in his portrait on
the agency's Web site he is dressed in army khaki and a beret.

One
of Pakistan's biggest employers, the utility is accused of squandering
money and, in at least one case, stealing it.

In June, Pakistan's
auditor-general reported that $32 million was embezzled from the utility
from 2000 to 2001. And it is one of three state-run entitiesthat "are unanimously seen as the most corrupt institutions and
responsible for most of the harassment of the private sector," John Wall,
the World Bank's director for Pakistan, told a Paris conference in
April.

The second company that Wall singled out was the Karachi
Electric Supply Corp. Ltd., also run by Khan and army Brig. Tariq
Saddozai. The government insists that both firms are well run.

"The
army was asked to assist a civilian government [in 1998] to reform these
two institutions, and today you will find they are vastly improved,"
Qureshi said. The water and power agency "was collapsing four years ago.
It's been reformed and is much better than what it was, and that was what
the army has been able to do."

Third on the World Bank corruption
list was the tax-collection agency. It is headed by a
civilian.

Praise for Officers

Some military officers
have garnered praise for their efforts to eliminate graft at public
agencies. Transparency International, a Berlin-based anti-corruption
organization, lauded Brig. Mohammad Behram Khan of the Karachi Water and
Sewerage Board in February for committing himself to award contracts to
low bidders and to shun bribes and kickbacks. He also saved the utility
millions in consulting fees, the group said.

Still, complaints of
foul water supplies and chronic shortages remain. A leaked report by the
utility's staff said the drinking water for about 14 million people is
heavily polluted with toxic waste. Khan was replaced last month by a
retired army brigadier. Utility officials did not respond to an interview
request Friday.

Beyond running many public agencies, Pakistan's
armed forces wield still more economic clout through four foundations
created to aid retired personnel and their families by giving them jobs, a
practice dating back to British rule. The largest is the Fauji, which
translates as "military."

The Fauji was established as a charity in
1953, with an endowment of $300,000. It is now a corporate empire that
includes sugar mills, a cement factory and a natural gas supplier. Another
foundation, the Army Welfare Trust, controls one of Pakistan's biggest
financial institutions, Askari Commercial Bank Ltd. Such conglomerates,
Siddiqa-Agha said, take business away from private companies.

Like
the defense budget, the military's business dealings are largely beyond
public scrutiny, and the armed forces discourage journalists and others
from asking questions, Rabbani and others complain.

Shaheen Sehbai,
former editor of the English-language daily the News, said he often was
pressured by officials to either not publish, or at least tone down,
stories that Musharraf's government didn't like.

In July 2001, his
newspaper uncovered an alleged $17-million insider fraud atthe Employees Old Age Benefit Institution, the government's
pension fund. Sehbai said he quickly took heat from senior
officials.

Exile in Virginia

"If you expose
corruption, you pay," said Sehbai, who now lives in self-imposed exile in
Virginia and publishes the crusading South Asia Tribune on the
Internet.

He said police are harassing relatives he left behind,
including several who have been jailed for questioning on what Sehbai
insists is a trumped-up charge that he robbed his former brother-in-law's
house at gunpoint. A cousin's 18-year-old son has been in jail since late
August without charge. Qureshi, Musharraf's spokesman, insisted that
police are acting independently in a criminal investigation.

Sehbai
fled Pakistan with his wife and four children in February, after
publishing a story that said Ahmad Omar Saeed Sheikh, convicted in the
murder of Wall Street Journal reporter Daniel Pearl, had admitted links to
Pakistan's Inter-Service Intelligence agency.

Sehbai said he was
urged to apologize to the ISI's political and media chief, Maj. Gen.
Ehtasham Zamir. But he refused.

"They wanted me to go and tell them
that I wouldn't do it again, and then they would all be happy.... I won't
do that. I'm not going to tell them I'm sorry."

Rabbani, of
Bhutto's party, and other politicians accuse Musharraf of using the ISI to
rig Thursday's election by coercing opposition candidates to quit and join
parties that support him.

Dozens of candidates have been threatened
with prosecution on corruption charges, or punishment, if they don't
change allegiance, Rabbani charged. Musharraf's officials deny the claim.
Rabbani's office has submitted a thick file on the alleged tampering to
Pakistan's election commissioner, who has promised to
investigate.

"In the history of Pakistan, we have not seen such
interference in an attempt to gerrymander the results of the elections,"
Rabbani said.